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The Risk of Trading. Mastering the Most Important Element in Financial Speculation. Edition No. 1. Wiley Trading

  • ID: 2218343
  • Book
  • April 2012
  • 224 Pages
  • John Wiley and Sons Ltd
Develop the skills to manage risk in the high-stakes world of financial speculation

The Risk of Trading is a practical resource that takes an in-depth look at one of the most challenging factors of trading - risk management. The book puts a magnifying glass on the issue of risk, something that every trader needs to understand in order to be successful.

Most traders look at risk in terms of a "stop-loss" that enables them to exit a losing trade quickly. In The Risk of Trading, Michael Toma explains that risk is ever-present in every aspect of trading and advocates that traders adopt a more comprehensive view of risk that encompasses the strategic trading plan, account size, drawdowns, maximum possible losses, psychological capital, and crisis management.

  • Shows how to conduct a detailed statistical analysis of an individual's trading methodology through back-testing and real-time results so as to identify when the methodology may be breaking down in actual trading
  • Reveals why traders should think of themselves as project managers who are strategically managing risk
  • The book is based on the author's unique 'focus on the risk' approach to trading using data-driven risk statistical analytics

Using this book as a guide, traders can operate more as business managers and learn how to avoid market-busting losses while achieving consistently good results.

Note: Product cover images may vary from those shown

Preface vii

Acknowledgments xiii

About the Author xv

Part I Principles of Risk Management 1

Chapter 1 Foundations of Risk Management 3

Chapter 2 Five Steps in the Risk Management Process 11

Part II Managing and Measuring Risk 61

Chapter 3 Predictive Analytics Using Quantitative Analysis 63

Chapter 4 Statistical Edge and Its Impact on Risk 71

Chapter 5 Embracing a Culture of Analytics 113

Part III Qualitative Elements of Risk 145

Chapter 6 The Human Element: Psychological Risks of Trading 147

Chapter 7 Preparing for Risk and Loss 161

Chapter 8 Business Risk Management for Traders 181

Bibliography 201

Index 203

Note: Product cover images may vary from those shown
Michael Toma
Note: Product cover images may vary from those shown